- Bankrupting the Enemy: The U.S. Financial Siege of Japan before Pearl Harbor
This is a meticulously researched account of how and why the United States devised a financial strangulation of Japan from early 1931 to December 1941. Edward S. Miller details the genesis and progression of the financial and economic sanctions that were designed to deter Japan’s aggression. Undaunted, “Japan was plunged into the international bankruptcy” (p. 241)— and thus the policy failed to achieve its ultimate objective.
Miller capitalizes on his thirty-five-year career in international finance, especially in his discussions of gold production, reserves, foreign securities, and foreign-currency bonds during the period 1937–40.He uses an impressively wide array of U.S. governmental sources, and many of them became declassified recently in the National Archives, such as files from the Treasury Department’s Office of the Assistant Secretary of International Affairs and files from the U.S. Alien Property Custodian. Where he lacks conclusive evidence, Miller openly admits so and then inserts his informed speculations on tantalizing questions of historical interest.
While paying careful attention to international finance leading up to December 1941, Miller focuses rather narrowly on the roles of a few specific second-tier policymakers. In so doing, he accuses “truculent lawyers [of being] determined to show Japan no mercy” (p. 108).Among the mare Dean Acheson, “a Europhile . . . [and] consummate opportunist,” and Henry Morgenthau [End Page 810] Jr., “the first to urge Roosevelt to launch financial warfare against Japan” (pp. 109, 180). In Miller’s view, many of the legal export restraints against Japan remained futile between 1935 and 1939. But Acheson’s role from January 1941 brought about “a turning point” in America’s policy, shifting it away from export restrictions and toward “full-blooded financial warfare against Japan” (p. 108). The result was “the most devastating American action against Japan” in the summer of 1941, i.e., the financial freeze (p. 1). For this purpose, as Miller reminds the reader, the Trading with the Enemy Act of 1917 was resurrected and “evolved into the ultimate U.S. weapon of financial power over foreign nations in time of peace” (p. 8). Studies by the Export Control Administration opportunistically supported ever-harsher sanctions against Japan, including a total embargo. The narrative ends with a summary of widely known—and somewhat old-hat—accounts of the Nomura-Hull talks that ended in December 1941.
Miller’s use of sources and presentation leave this reviewer wondering what some information really means, or whether it adds anything substantive to the text. For example, the vertical axes of three graphs in a chart on page 137 lack units, and thus it fails to convey fully the import of the numerical data. Presumably signifying a popular representation, the cartoon illustration of “The financial freeze of 26 July 1941” (p. 199) is even more puzzling. This piece of evidence, with no information other than that it came from “Library of Congress,” adds no substance to the author’s arguments vis-à-vis elites in Washington. On a point of lesser importance, the writing itself is at times choppy. By inserting more subheadings in the text than necessary, Miller interrupts his narrative flow despite its lucidity.
Of course, none of these relatively minor points substantially weakens Miller’s thesis. This chronicle of financial warfare against Japan is a welcome addition to our scholarship on Japanese-American relations. Even though rich details throughout the text offer information that is of greatest value to diplomatic historians, historians of technology can benefit immensely from the discussions of Japan’s economic structure from the 1890s to 1931 and the vulnerability studies of 1941. Miller amply demonstrates his staunch empiricism throughout the text, skillfully contextualizing Japan’s military and civilian technologies within binational relations prior to the Pearl Harbor attack of 1941. [End Page 811]
Dr. Nishiyama is assistant professor in the Department of History at the State University of New York at Brockport.